世界银行（World Bank）：东帝汶经济报告2024年1月-打造稳定、包容和有韧性的金融部门

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TIMOR-LESTEECONOMICREPORT

FitforPurpose:CraftingaStable,InclusiveandResilientFinancialSector

January2024

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Timor-LesteEconomicReport

FitforPurpose:CraftingaStable,InclusiveandResilientFinancialSector

January2024

Acknowledgment

TheTimor-LesteEconomicReport(TLER)isabi-annualWorldBankreportthatassessesrecentmacroeconomicdevelopments,outlook,andrisks,aswellasspecificdevelopmentchallengesfortheTimoreseeconomy.Indoingso,theTLERaimstoinformthepublicpolicydebateandisgearedtowardsawideaudience,includingthegeneralpublic,thegovernment,theprivatesector,civilsocietyorganizations,andotherdomesticandinternationalstakeholders.

TheTLERisaproductoftheWorldBankJakartaandTimor-LesteofficeandreceivesstrategicguidancefromaneditorialboardchairedbySatuKahkonen,CountryDirectorforIndonesiaandTimor-Leste.ThereportispreparedbytheMacroeconomics,Trade,andInvestment(MTI)GlobalPracticeteam,undertheguidanceofLarsChristianMoller(PracticeManager),RinkuMurgai(PracticeManager),CecileThioroNiang(PracticeManager)BernardHarborne(ResidentRepresentative),HabibRab(ProgramLeaderandLeadEconomist),andFrancescoStrobbe(LeadFinancialSectorEconomist).Theproductionofthereport'sfirstandsecondchaptersisledbyAliefAuliaRezzaandYusMedinaPakpahan.BambangSuharnokoSjahrirandCigdemCelikauthoredSection1.2.AnandaNathanNarasimhancontributedtoBox1.1.ThechapterfocusingontheFinancialSectorwasauthoredbySalmanAlibhai,IGedePutraArsana,CalvinKoenig,andAlexandreHugoLaure.AnadeOliveiraprovidedadministrativesupportandcoordinatedtheorganizationofthereport'slaunchevent.

WewouldliketoacknowledgetheMinistryofFinance,InstitutoNacionaldeEstatisticaTimor-Leste(INETL),IP,CentralBankofTimor-Lesteastheproducersandcompilersofmostdatausedinthisreport.

ThereportalsobenefitedfromcommentsprovidedbyAminaCoulibaly,DaisukeFukuzawa,ErgysIslamaj,MadhavLala,WarunthornPuthong,AchimDanielSchmillen,MiguelAngelSorianoandGastaoM.G.deSousa.

ThisreportisaproductofthestaffoftheInternationalBankforReconstructionandDevelopment/theWorldBank.Thefindings,interpretations,andconclusionsexpressedinthisreportdonotnecessarilyreflecttheviewsoftheExecutiveDirectorsoftheWorldBankorthegovernmentstheyrepresent.TheWorldBankdoesnotguaranteetheaccuracyofthedataincludedinthiswork.Thedatacut-offdateforthisreportwasDecember01,2023.Theboundaries,colors,denominations,andotherinformationshownonanymapinthisworkdonotimplyanyjudgmentonthepartoftheWorldBankconcerningthelegalstatusofanyterritoryortheendorsementoracceptanceofsuchboundaries.

ToreceivetheTLERandrelatedpublicationsbyemail,pleaseemailadeoliveira1@.Forquestionsandcomments,pleaseemailarezza@andypakpahan@.

TableofContents

ACKNOWLEDGMENT III

TABLEOFCONTENTS IV

LISTOFFIGURES,TABLESANDBOXES V

SUMMARY

1

1.RecentDevelopments

1

2.OutlookandRisks

2

3.SpecialFocus:BuildingaStable,InclusiveandResilientFinancialSectorinTimor-Leste

2

1.RECENTDEVELOPMENTS

5

1.1.Globaleconomicactivitycontinuestosoftenandwhilethepricesofmostcommoditieshave

retreatedfromtheir2022peaks,theyremainhigherthanpre-pandemiclevels

5

1.2.Consumption-fueledrecoverycoupledwithconcerningdeclineininvestment

6

1.3.Lackofeconomicdynamismhindersjobcreation

8

1.4.Thefiscalpositionhasimprovedduetodifficultiesinexecutingthebudget

11

1.5.Fiscalexpansionhasledtoamplebankliquidity

12

1.6 andcausedlargeandpersistentexternalimbalances............................................................

14

1.7.Despitesomemoderation,pricepressuresremain

16

2.OUTLOOKANDRISKS

19

3.FITFORPURPOSE:CRAFTINGASTABLE,INCLUSIVEANDRESILIENT

FINANCIALSECTORINTIMOR-LESTE

23

3.1.Introduction

23

3.2.FinancialSectorContext

24

3.3.FinancialStabilityinTimor-Leste

26

3.4.FinancialInclusioninTimor-Leste

28

3.5.FinancialResilienceinTimor-Leste

34

3.6.PolicyInterventionsandWaysForward

37

ANNEX1:KEYINDICATORS

39

ANNEX2:PEERSELECTION

40

REFERENCES

41

WorldBankGroupJanuary2024iv

ListofFigures,TablesandBoxes

FIGURES

Figure1.1:Theeconomycontinueditsrecoveryin2022

6

Figure1.2:butthecountry’soutputisyettoreturntoitspre-pandemiclevel

6

Figure1.3:Majorityofpopulationreceivedvarioussocialassistances

7

Figure1.4:Remittancesaremainlyusedforconsumption

7

Figure1.5:GDPgrowthhasmainlybeendrivenbyexpansionofpublicsector

8

Figure1.6:Bothpublicandprivateinvestmentwerestillbelowthe2015level

8

Figure1.7:LaborForceParticipationandemploymentratesremainedatalowbase

8

Figure1.8:Timor-Lestehasthelowestlaborforceparticipationamongselectedsmallstates

9

Figure1.9:Unemploymentdeclined,whilenumberofpeopleoutoflaborforcerosefasterthanthe

laborforce

9

Figure1.10:GVA/capitareductionwasprimarilydrivenbyfallinglaborproductivity

10

Figure1.11:Structuraltransformationhelpedpartiallyoffsettheeffectsofreducedlaborproductivity

inservicesandindustrysectors

10

Figure1.12:Sectorsthathaveseendeclinesinlaborproductivityalsoexperiencedanincreasein

employment

10

Figure1.13:Asof2021,employmentisconcentratedinlowerproductivitysectors

11

Figure1.14:ThebudgetexecutionrateacceleratedbytheendofOctober

12

Figure1.15:BroadmoneyasashareofGDPnearlydoubledbetween2019and2023

13

Figure1.16:Largeoverseasplacementofbankassetshasbeenthenorm

13

Figure1.17:LoantodepositratiocontinuedtorecoverafterdecliningduringthePandemic

13

Figure1.18:Thecurrentaccountdeficitworsenedduetothedeteriorationofthetradebalance.......14

Figure1.19:Thecumulativenetfinancialaccountrecordedanegativebalance,drivenbylowFDIand

negativeportfolioinvestment

14

Figure1.20:Receiptsofcoffeeexportsdeclinedsharplyowingtofallingprices

15

Figure1.21:Goodsimportsremainedhighandcontributedtotheconsistentlyhightradedeficit.....15Figure1.22:REERcontinuedtoappreciate,surpassingNEER,duetohighdomesticinflation.......15

Figure1.23:RealexchangerateagainstIndonesiaRupiahandAustralianDollarcontinuedto

appreciate

15

Figure1.24:Inflationremainedhigh,duetofoodandnon-alcoholbeveragespriceinflation

17

Figure1.25:Thepriceinflationofrice,vegetables,andsugarrelatedgoodswerethemaincontributors

totheprice’sinflationoffoodandnon-alcoholicbeveragesitems

17

Figure1.26:Tradablegoodspricesremainedhighamidstthedecelerationofglobalprices

17

Figure1.27:InflationhadbeendeclininginTimor-Lestemajortradingpartners

17

Figure2.1:Thelowbudgetexecution,especiallyduringtheelectionyears,ledtopooreconomic

performance

20

Figure2.2:Nearly70percentofrevenuesisatriskintheeventofthecompletedepletionofPetroleum

Fund

21

Figure2.3:Plannedcapitalbudgetwashigh,butexecutionwaslow

22

Figure3.1:Domesticcredit(percentofGDP)

25

Figure3.2:Broadmoney(percentofGDP)

25

Figure3.3:BankBranchesper1'000adults

25

Figure3.4:Accountownershipatafinancialinstitutionorwithamobilemoneyserviceprovider...25

Figure3.5:CapitalAdequacyRatio

25

Figure3.6:Non-performingloanratio

25

Figure3.7:AssetQuality

27

Figure3.8:Profitability

27

Figure3.9:NetInterestMargins

27

WorldBankGroupJanuary2024v

Figure3.10:Accesstofinanceforfirms(cross-countrycomparison)

30

Figure3.11:Loanandcollateral

30

Figure3.12:Bank’screditcomposition(Dec2021)

30

Figure3.13:Privatesectorcreditoverview

30

Figure3.14:Financialaccessindicators

32

Figure3.15:Financialservicesaccesspointevolution

32

Figure3.16:Remittancesinflow

33

Figure3.17:Increasedimpactofnaturaldisastersduetoclimatechange

35

Figure3.18:AverageAnnualLossesunderdifferentclimatechangescenarios

35

TABLES

Table1.1:Timor-Leste’s2022GrowthPerformance

6

Table1.2:PerCapitaValueAddedandlaborproductivitydeclinedbetween2013and2021

9

Table1.3:2023BudgetStructurebeforeandafterrectification

11

Table1.4:ComparedtootherPacificIslandCountries,Timor-Leste’sbankcreditwasrelativelylow,

butthemoneysupplywasatthehighside

13

Table2.1:EconomicForecast

19

Table3.1:FinancialStabilityinTimor-Leste

28

BOXES

Box1.1:ExchangeRateRegimesinTimor-Leste

16

Box2.1:GrowthandBudgetExecutionduringPoliticalYears

20

Box2.2:Proposed2024Budget

22

Box3.1:InitiativestoexpandprivatesectorcreditinTimor-Leste

31

KEYINDICATORS

Population(million)

1.3

GDPnon-oil&gas(nominalUSDbillion,2022)

1.6

GDPpercapita(USD,2022)

1,247

Povertyheadcountratio-nationalpovertyline(%population)

41.8

Povertyheadcountratio-USD1.90aday(2011PPP,%population)

22.0

Povertyheadcountratio-USD3.20aday(2011PPP,%population)

65.9

GINIindex

28.7

Notes:PopulationandGDPdataarefor2019.Povertyandinequalitydataarefor2014(withrevisedPPPs).

WorldBankGroupJanuary2024vi

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Summary

1.RecentDevelopments

Thefinalnationalaccountsfor2022haveslightlyraisedthenon-oilgrowthrate,withconsumptiondrivingeconomicactivities.1The2022growthwasadjustedto4.0percent,slightlyhigherthantheinitialestimateof3.9percent.Althoughthisrepresentsacontinuationofthe2.9percentgrowthexperiencedin2021,thecountry’soutputlevelisyettoreturntoitspre-pandemiclevel.Thestrongprivateconsumptionin2022wasdrivenbygovernmenttransfersandremittances.However,thepersistentweaknessinbothpublicandprivateinvestmentoverrecentyearsraisesconcernsabouttheprospectsforlong-termrecovery,potentiallyimpactingfutureoutputpotentialandproductivity.

TheIXConstitutionalGovernmenthasanambitioustargetofcreatingsome50000jobsoverthenextfiveyears,butthelackofeconomicdynamismhindersjobcreationforrapidlyexpandingworkforce.Laborforceparticipationhasstagnatedatapproximately30.6percentoveraneight-yearperiod,oneofthelowestlevelsintheworld,asindicatedbysuccessiveLaborForceSurveys.Additionally,laborproductivityhasdecreased,withthepopulationgrowthoutpacingtheriseingrossvalueadded.Aworryingtrendistheincreasingconcentrationofemploymentinsectorswithdeclininglaborproductivity.

Inresponsetosevereslowbudgetexecution,thenewgovernmentrevisedthe2023budget,decreasingplannedexpenditureby12percent,aligningcloselytotheactualspendingin2022.Allspendingcategories,exceptsalariesandwages,werereduced,withcapitalspendingfacingthelargestcut.Concurrently,thegovernmentreversedrecentinitiativestoboostrevenue.Taxesonsugarandsugarydrinkswererepealedwhileimportdutiesandtobaccoexciserateswerereducedtothepreviousyear'slevels.Followingtheseadjustments,thefiscaloutlookfortheyearimproved,withthedeficitnowprojectedtobejustunder60percentofGDP.

Forthefirstninemonthsof2023,consumerpriceinflationremainedhighat8.3percentyear-on-year,drivenbyanotableriseinbothfoodandnon-foodprices.ThisupwardtrendhaspersisteddespiteadecreaseininflationratesamongTimor-Leste'skeytradingpartnersandthestrengtheningoftheUSdollar.Althoughthegovernmenthasmadeeffortstocurbinflationanddespiteageneraldeclineinglobalprices,thecostoftradablegoodshasremainedhigh.

Thegrowthinmoneysupplyhasparalleledfiscalexpansion,leadingtosubstantialliquidityinthebankingsectorwhichremainslargelyunutilizedbytherealsector.TheratioofbroadmoneytoGDPnearlydoubled,increasingfrom42.4percentinOctober2019to78.8percentinSeptember2023.Asignificantportionofbankingsectorassetsarehoweverheldoverseaswhileloanstotheprivatesectorhaveonlyrecentlyshownsignsofgrowth.Challengesinriskassessmentforpotentialborrowersandtheabsenceofalegalframeworkforloanprotectionremainkeystructuralissues.

TherehavebeenconsistenttradedeficitssinceQ42022,reaching17.1percentofGDPbySeptember2023.Thedeficitismorepronouncedwhenoilandgasexportsareexcluded.Thelargeexternalimbalancesareprimarilyduetopersistentexpansionaryfiscalpolicythatsurpassestheeconomy'scapacitytoabsorb,coupledwithlimiteddomesticproductionandexportsthatareinsufficienttocounterbalancethesignificanttradedeficit.

1ThebifurcationoftheGrossDomesticProduct(GDP)intooilandnon-oilinTimor-Lestenotonlyunderscorestheimpactofoilrevenuesonthenationaleconomybutalsooriginatesfromthemaritimeboundarydispute,settledin2019.Thissettlementinfluencedtheacknowledgmentandadministrationofoilandgasproduction.Inthecontextofthisreport,anymentionofGDP,unlessexplicitlydifferentiated,pertainstothenon-oilGDP.

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Timor-LesteEconomicReportFitforPurpose:CreatingaStable,InclusiveandResilientFinancialSector

2.OutlookandRisks

Theeconomyisexpectedtomaintainitsgrowthin2023,sustainingthegradualrecoverythatbeganin2021.Thegrowthrateisanticipatedtotaperto2.3percentin2023,attributedtoadecelerationineconomicactivitiesduringpoliticaltransitionsandconsequentpausesingovernmentspending.Economicgrowthisprojectedtoaverageat4.1percentin2024and2025.Thegovernment'sfocusoncapitalexpenditureandinfrastructureinvestment,increasingthebudgetfrom18.4percentofGDPin2023to24.5percentofGDPinthe2024,islikelytofurtherdrivegrowth.However,exportgrowthmayfaceconstraints,largelyduetothedependenceoncoffeeastheprimaryexportcommodity.

Inflationisprojectedtoeasein2024,drivenbyamoderationinglobalcommoditypricesandastabilizationofglobalfoodsecurityconditions.Additionally,reducedinflationratesinthetradingpartnersofTimor-Lesteareexpectedtolessentheimpactofimportedinflation.Albeitbeneficialineasingpricepressures,thenewgovernment'sdecisiontorevoketheimplementationofrevenuemeasures,suchasexcisedutiesonsugar,sugarybeverages,andtobacco,mayundermineeffortsaimedatincreasingrevenuecollectionandcontrollingtheconsumptionofgoodsthathavenegativehealthimpacts.

Thefiscaldeficitisexpectedtohoveraround43percentofGDPoverthemediumtermwithoutfiscalreforms.ThebudgetshortfallisbeingcoveredthroughwithdrawalsfromtherapidlydecliningPetroleumFund.BeforetheFundiscompletelydepleted,whichtheGovernmentprojectstooccurin2034,itwillneedtoeitheridentifynewrevenuesourcestoreplacemorethan70percentofitscurrentrevenuesorimplementsignificantspendingcuts.Thelattercouldleadtoasubstantialreductioninpublicservices,asituationoftenreferredtoasthe'fiscalcliff.'

Theoutlookissubjecttoseveraldownsiderisks.Adverseweatherevents,notablythoseassociatedwithElNino,coulddisruptriceavailabilityandimports.Additionally,highenergypricesarelikelytoincreasetransportationandelectricitycostsdomestically.Risingfoodandenergypricesmayrequireafiscalresponse,potentiallyimpedingexpenditurerestraintefforts.Furthermore,theperformanceoftheUSdollar,Timor-Leste'slegaltender,directlyimpactsdomesticeconomy.Astrongerdollarmakesexportscostlierandimportscheaper,whileaweakerdollardoestheopposite,affectingbothrevenuesandcostsfrominternationaltradeaswellaslocalcostofliving.

ReachingtheIXConstitutionalGovernment'stargetof5percentannualeconomicgrowthreliesonpoliciesthatsupportasustainable,diversifiedeconomy.Arobustprivatesectorisessentialforprovidingstableemploymentandsustainingprivateconsumption.Inturn,thedevelopmentofprivatesectorsrequiresanenvironmentthatfostersitsgrowthanddynamism.Inthisregard,financialdeepeningandinclusionareessential,astheyprovidetheprivatesectorwithaccesstofinancialproductsandservicesthatenablesbusinessestodriveeconomicactivitiesandcontributestooveralleconomicgrowth(seeChapter3).

3.SpecialFocus:BuildingaStable,InclusiveandResilientFinancialSectorin

Timor-Leste

ThedevelopmentofarobustfinancialsectorcanhastenTimor-Leste’spursuitofbroad-basedandinclusiveeconomicgrowth.Accesstoformalfinancialservices,suchassavingsaccounts,creditfacilities,insurance,andpaymentsystems,canhelphouseholdstoaccumulateassetsandsmoothconsumption,therebyreducingvulnerabilitytoshocks,andhelpingbreakthecycleofpoverty.Thesesamefinancialservicescanalsomobilizedomesticsavingsandchannelinvestmentstowardsproductivesectors,enablingfirmstoinnovateandgrow.Meanwhile,astableandwell-regulatedfinancialsectorcanattractgreaterforeigninvestmentandmitigatetheimpactofeconomy-wideshocks,suchasthoseposedbydiminishingresourcereservesandnaturaldisasters.

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Timor-LesteEconomicReportFitforPurpose:CreatingaStable,InclusiveandResilientFinancialSector

Asoneoftheworld’syoungestcountries,Timor-Leste’sfinancialsectorappearsremarkablyvibrantinsomerespects,withawidevarietyoffinancialsectoractors,relativelydevelopedfinancialsectorinfrastructure,andadequatelevelsofliquidityandriskmanagementinthebankingsector.Peeringslightlybelowthesurface,however,severalcriticalconstraintsemerge,whichlimittheabilityofthefinancialsectortoplayitsfullroleinsupportingtheeconomyanditspeople.ThelevelofcredittotheprivatesectorinTimor-Leste–akeyindicatorofthereachandinclusivenessofthefinancialsector–standsatonly28.9percentofGDP,amongthelowestlevelsintheworld.Digitalbankaccountsanddigitalpayments,whichcouldreducecostsandexpandoutreachoffinancialservicestomarginalizedsegmentsofthepopulation,areutilizedbyonly10to15percentofthepopulation.Meanwhile,thecountry’sfinancialsectorstandsexposedtooutsizedeconomicrisksfromnaturaldisastersandothershocks.

ThreewatchwordscanguidethedevelopmentofTimor-Leste’sfinancialsector:inclusion,stability,andresilience.Digitizingfinancialservicesandimprovingaccesstocreditforfirmscanboostinclusion,helpingTimoresehouseholdsinvestintheirownwelfareandreapthebenefitsofeconomicgrowth.Moreuseofdataandearlywarningsystemscanensurethatthecountry’sfinancialsectorremainsstableevenasitexpandsandgrows.Finally,dedicatedstrategiesandfinancinginstrumentscanensurethatthefinancialsectorisresilientenoughtomitigatetheimpactofnaturaldisastersandothershocksonthebroadereconomy.Takentogether,thesemeasurescanhelpTimor’sfinancialsectormatureintoonethatcansupportthecountry’saspirationsforeconomicgrowthandpovertyreductioninthedecadesahead.

WorldBankGroupJanuary20243

Timor-LesteEconomicReportFitforPurposeCreatingaStable,InclasireandResilientFinaneialSedor

1.RecentDevelopments

o

1.1.Globaleconomicactivitycontinuestosoftenandwhilethepricesofmostcommoditieshaveretreatedfromtheir2022peaks,theyremainhigherthanpre-pandemiclevels.

Theglobaleconomyisgraduallyrecoveringfromaseriesofshocks,whiletheeconomicperformanceinmostofEastAsiaandthePacific(EAP)isinfluencedbyChina'sgrowthmomentum.Globalactivityhasnotyetreturnedtoitspre-pandemictrends.Thelong-termeffectsofthepandemicandthewarinUkrainearehinderingtherecovery.ThechallengesarecompoundedbytheimpactsofmonetarypolicytighteningandfiscalconsolidationafterexceptionalsupportduringCOVIDaswellasextremeweatherevents.?TheEAPregionhasbenefitedfromasurgeindomesticdemandasAsia'seconomicreopeningfromCOVID-19healthrestrictionsoccurredlaterthanelsewhere.Morerecentdataneverthelessindicateaslowingmomentum.TherecoveryinChinaislosingpaceasconditionsintherealestatesectorcontinuetoweaken.Thisslowdownisikelytoimpactthewiderregion,especiallycommodityexporterswithstrongtradelinkstoChina.

Mostcommoditypricesdeclinedin2023duetomoderatingdemand,buttheyremainabovepre-pandemiclevels.Oilpriceswerehighlyvolatileinthesecondhalfof2023amidOPEC+productioncutsandtheMiddleEastconflict.Foodcommoditypricesmoderatedaswell,reflectingimprovedsuppliesformajorcrops.Foodinsecurityremainsakeychallengeamidhigh,albeitdeclining,consumerfoodpriceinflation.Thenumberofpeoplewhoareseverelyfoodinsecuregloballyisestimatedtohaverisenfrom624millionin2017to900millionin2022(FAOetal.2023).Therecentsurgeinricepricesislikelytoexacerbatefoodinsecurityasriceisastaplefoodforoverhalftheworld'spopulation,providingmorethan20percentofthecaloriesconsumedworldwide.

2ReadersareinvitedtorefertotheWorldBank'sJanuary2024GlobalEconomicProspectforadetailedanalysispertainingtotheglobaleconomy.

WorldBankGronp|January20245

Timor-LesteEconomicReportFitforPurpose:CreatingaStable,InclusiveandResilientFinancialSector

1.2.Consumption-fueledrecoverycoupledwithconcerningdeclineininvestment.

Withlimitedtiestotheglobaleconomy,Timor-LesteisonthepathtorecoveryfromitsrecenteconomicdownturncausedbyCOVID-19andtheimpactsofTropicalCycloneSeroja.Afterasignificantcontractionof8.3percentin2020,thenon-oileconomyrecoveredonlypartially,growingby2.9percentin2021andthenby4.0percentin2022(Figure1.1).Despitethesetwoconsecutiveyearsofpositivegrowth,Timor-Leste'seconomicoutputhasyettoreachitspre-pandemiclevels.TherecoveryrateisslowercomparedtotheaverageforEastAsiaandPacific(EAP)countries,aswellastheaverageforlowandmiddle-incomecountries,butitisfasterthanthatofthePacificIslandcountries(Figure1.2).Privateconsumptionhasbeenthemaindriverofgrowth,fueledbythepost-pandemicreopening.ExportsandForeignDirectInvestmentinthenon-oilandgassectorsremainverysmall.Thelimiteddomesticproductionbasemeansthattheeconomyremainsheavilydependentonimports.Asaresult,globaleconomicconditions,particularlyfluctuationsincommodityprices,impactsignificantlyonTimor-Leste’sdomesticeconomy.

Thefinalnationalaccountsfor2022havemarginallyrevisedupthenon-oilgrowthrate,withnotablechangesinthedriversofgrowth.GDPgrowthfor2022wasrevisedupslightlyfrom3.9percent,preliminarilyannouncedinMarch2023,to4.0p